What is withholding tax?

Withholding is a system in which the payer of income (the withholding agent) deducts tax in advance when paying the recipient and pays it to the State on the recipient's behalf.

This is why the deposit interest or fund distributions you receive have already had tax taken out. In some cases, withholding concludes the tax liability (separate taxation); in others, the income is combined with other income and settled again (comprehensive taxation).